The Norwegian tanker shipping company Frontline has sold eight VLCCs for more than $800 million At the same time, it expects to take delivery of new ships this year.
According to the shipping company, the vessels are eight first-generation eco-VLCCs (Very Large Crude Carriers) built between 2015 and 2016 and sold for a total of $831.5 million. Delivery to the as-yet unnamed buyer is scheduled for the first quarter of 2026. Frontline expects net cash proceeds of about $486 million after debt repayment, with a profit of between $217.4 million and $226.7 million depending on the individual delivery dates.
The sale is offset by the order for a total of nine newbuildings, which Frontline is taking over from its largest shareholder Hemen Holding, whose owner John Fredriksen is also President of Frontline. The vessels are also eco-VLCCs that are to be equipped with scrubbers. Six will be built at the Hengli shipyard and the remaining three at the Dalian shipyard in China. The purchase price amounts to a total of 1.224 billion dollars.
Delivery as early as 2026
Seven of the vessels are scheduled for delivery as early as this year from the third quarter, with the remaining two to be delivered early in 2027. “The payment schedule for these acquisitions is aligned with delivery, with the majority of the installments due upon delivery of each vessel,” says Frontline. The company intends to finance this acquisition with cash and long-term debt financing.
“These two transactions will allow Frontline to modernize its fleet by replacing ten year old first generation eco-vessels with latest generation eco-vessels with scrubbers at very fixed prices,” said Lars H. Barstad, CEO of Frontline Management. “This is in line with our strategy to operate one of the most modern, cost and fuel efficient fleets in the market.”
The acquisition also supports the commitment to the VLCC segment without increasing the overall supply of vessels. “The delivery date is particularly attractive as it falls within a period that is usually considered closed for newbuilding orders. With this transaction, Frontline is making concrete progress towards improved fuel efficiency and reduced CO₂ emissions,” concluded Barstad.
Following the completion of these transactions, Frontline’s fleet will consist of a total of 81 vessels. The fleet consists of 42 VLCCs, 21 Suezmax tankers and 18 LR2/Aframax tankers, making the Cyprus-based company one of the largest tanker shipping companies in the world.
